What Is LNG and How Does It Work?

Last updated: September 24, 2026

LNG (liquefied natural gas) is natural gas that has been cooled to about −162°C (−260°F), turning it into a liquid roughly 1/600th the volume of the gas at room temperature. Shrinking it this much lets producers ship gas by sea in specialized tankers to markets that have no pipeline connection, then turn it back into gas at an import terminal before it enters the grid. Global LNG trade reached about 411 million tonnes in 2024, according to the International Gas Union.

Definition

LNG is not a different substance from the natural gas that flows through pipelines — it is the same gas, mostly methane, that has been purified and then liquefied by cooling rather than by compression. Liquefaction removes the need for a continuous pipeline between producer and buyer: once loaded onto a purpose-built LNG carrier, the cargo can be shipped anywhere in the world with a receiving terminal. At the destination, the liquid is warmed back into gas (regasified) and injected into the local pipeline network.

This distinguishes LNG from LPG (liquefied petroleum gas), which is propane and butane liquefied under moderate pressure at near-ambient temperature, and from CNG (compressed natural gas), which stays gaseous but is compressed for use mainly in vehicles and short-haul distribution.

How It Works

The LNG value chain has four stages:

• Production and treatment: raw gas is extracted and processed to remove water, carbon dioxide, and other impurities that would freeze during cooling.
• Liquefaction: the treated gas is cooled in stages, typically using large refrigeration trains, to about −162°C, at which point it becomes liquid at atmospheric pressure.
• Shipping: LNG is loaded onto double-hulled, cryogenically insulated LNG carriers and transported by sea, sometimes for weeks, with continuous refrigeration and boil-off management.
• Regasification: at the receiving terminal, the LNG is warmed — often using seawater or ambient-air heat exchangers — back into gas and sent into the pipeline network. Floating regasification units, known as FSRUs, allow countries to import LNG without building a fixed onshore terminal.

Why It Matters

LNG decouples gas supply from geography. A country with no pipeline link to a gas-producing region — Japan, South Korea, or an island state, for example — can still import gas by ship from Qatar, the United States, or Australia. This has turned natural gas from a largely regional fuel, tied to fixed pipeline corridors, into a globally traded commodity that responds to price signals set by regional benchmarks such as Henry Hub (US), TTF (Europe), and JKM (Japan-Korea Marker, the Asian spot benchmark). LNG has also become central to energy security debates: Europe leaned heavily on LNG imports after pipeline gas from Russia was curtailed following 2022, and Asian buyers increasingly sign long-term contracts to lock in supply.

Where It Is Used

LNG supplies power generation, industrial heat, residential and commercial heating, and, in some markets, transport fuel for ships and heavy trucks. The largest importing regions are East Asia (Japan, China, South Korea) and, more recently, Europe, which sharply increased LNG imports after 2022 to offset lower pipeline volumes.

Key Characteristics

Sources: International Gas Union, 2025 World LNG Report; GIIGNL Annual Report 2025. Figures differ slightly between the two industry bodies due to methodology.

Related Technologies

• FLNG (floating liquefied natural gas): a vessel that liquefies gas produced offshore without a pipeline to shore.
• FSRU (floating storage and regasification unit): a ship-based import terminal that regasifies LNG, used where building fixed onshore infrastructure would be slower or costlier.
• LNG carrier: a purpose-built, cryogenically insulated tanker; most modern vessels use membrane-type containment systems.
• Boil-off gas management: because perfect insulation is impossible, LNG carriers use boil-off gas as fuel or re-liquefy it during the voyage.

Real-World Examples

• Qatar’s North Field is the world’s largest non-associated natural gas field and the anchor resource for QatarEnergy’s LNG export program, run through terminals at Ras Laffan.
• The United States became the world’s largest LNG exporter in 2023 and held that position through 2024, exporting from terminals such as Sabine Pass and Corpus Christi, built on the back of the shale gas boom.
• Japan was the founding large-scale LNG importer, receiving its first cargo from Alaska in 1969, and remains one of the top three LNG-importing countries.

FAQ

Is LNG the same as natural gas?

Chemically, yes — LNG is natural gas that has been cooled into a liquid for transport. Once regasified, it is indistinguishable from pipeline gas.

Is LNG the same as LPG?

No. LNG is liquefied methane, cooled to a cryogenic temperature. LPG is liquefied propane and/or butane, which liquefies under moderate pressure at ordinary temperatures and is used differently (heating cylinders, autogas).

Why is LNG shipped instead of piped everywhere?

Pipelines are cheaper over land and short sea crossings, but building one across an ocean or through hostile terrain is often impossible or uneconomic. LNG lets gas move by ship to any coastal market with a regasification terminal.

Which countries export the most LNG?

In 2024 the largest exporters were the United States (~88.4 million tonnes), Australia (~81.0 million tonnes) and Qatar (~77.2 million tonnes), together accounting for 60% of global LNG exports, per the IGU.

Related The Daily Energy Pages

• OPEC — the producer group that sets oil (not gas) output policy but shapes the wider energy-market context LNG trades in
• Saudi Aramco — a major oil and gas company whose gas strategy overlaps with the LNG market
• Natural Gas — the parent resource LNG is made from
• QatarEnergy (queued — The Daily Energy Encyclopedia)
• Henry Hub (queued — The Daily Energy Encyclopedia)

Sources

• International Gas Union, 2025 World LNG Report (igu.org)
• GIIGNL, 2025 Annual Report (giignl.org)
• U.S. Energy Information Administration, Natural Gas Explained (eia.gov)

Illustrative image. Photo: Gordon Leggett, CC BY-SA 4.0, via Wikimedia Commons — source